Help Getting started 100K pot Bournemouth area

[larsjo 0]

Dear Hubbers,

 

my partner and I are in dire need of help!

 

our longterm goal is to have portfolio generating a cashflow of +5K of rental income from single lets, that will provide us with a pool fund to do the occassional BTS as and when we see an opportunity.

 

we are both full time professionals and do not want to take out any money as we do not need it initially but would want to create a healthy portfolio that in time would give us to option to either develop the company furhter or continue working being happy with what we have on the side.

 

We have starting capital of 100K approx - how do we give ourselves the best start ?

 

Lars & Zena

 

 

 

[richard brown 720]

Hi Lars & Zara

 

Sounds like a sensible, long-term approach.

 

A lot of people ask the sort of question that you have, 'what should I do when I have a starting fund of £x?' So, I recorded something of a mini-series on the topic a while back. You can find the podcast and transcription of the most relevant episode to your situation here: http://www.thepropertyvoice.net/soundbite-episode-i-150000-invest-in-property-buy-1-4-properties/

 

However, feel free to check them all out as it covers a wide amount of ground and so some differences, but also picks up on some common factors too.

 

Hope that helps you,

 

Best

Richard

[larsjo 0]

Hi Richard,

 

Funny enough we were actually both listening to this Podcast on the way to the office this morning! 

 

A lot of good points in there which provided more than enough food for thought..

 

I think our plan is to get 2 simple BTL's and then reinvest the profits in 3 year in a 3rd property and continue this rhythm for the next 5 years. Doing some rough numbers we would want a portfolio of 20 properties by year 10, and then take a good look on whether or not to quit our jobs to devote our full attention to scaling the business. 

 

We have meetings set up for the coming week with Solicitors, brokers and a tax guru (hopefully)

 

Thanks for taking the time to share your podcast. 

 

Any tips you might have with the above in a ltd company form would be much welcomed! 

 

Lars & Zena

 

[MichaelB 2]

Hi Richard,

 

I too am in the "what should be done with starting fund X". I found your podcast/article really useful - in particular the "climb up the property food chain" part which I had not considered previously. 

 

I think it is a particularly attractive option that you don't hear talked about all that often. When starting out, I imagine each deal will take a great amount of time and effort because everything is so new. Added to that, us newbies are going to agonise over many decisions, so deal velocity will be low. It will take years to get all 100k invested if just buying very small properties - why not get it all invested within 3 months? 

 

However, risk is higher, and there is probably less room to add value to larger properties (proportionally). And cutting one's teeth on the smaller properties will allow one to learn faster...

 

Thanks for the input!

[richard brown 720]

On 5/11/2018 at 3:24 PM, larsjo said:

Thanks for taking the time to share your podcast. 

 

Any tips you might have with the above in a ltd company form would be much welcomed! 

 

Lars & Zena

 

 

Hi Lars & Zena

 

Glad you found the podcast useful...that's the intention

 

WRT the limited company set up, I am sure you will get some good tips from the respective advisers. One from me...if you introduce funds as a director / shareholder loan, rather than as equity, you can withdraw them later more easily and without a tax penalty, should you need or wish to do so. Also, I know that you did not mention property trading, but make sure you acquire any 'keepers' in a different company to any potential 'flippers' as they classed as different activities. BUT please check all with your professional advisers as they should provide advice on your personal situation.

 

Good luck!

Richard

[richard brown 720]

On 5/12/2018 at 4:59 PM, MichaelB said:

I too am in the "what should be done with starting fund X". I found your podcast/article really useful - in particular the "climb up the property food chain" part which I had not considered previously. 

 

Hi Michael

 

Yes, there is a lot to be said about walking before running! However, to illustrate the point, I am just acquiring a site in a single transaction that will convert into 10 flats for just £250k (£75k deposit). Granted, in this case, I also have to provide development funds and take on the conversion work to add value, which as you say adds to the risk and complexity. An alternative would be to buy a small block of flats without the development side of things for a ready-made income source.

 

I am more experienced and so am able to both assess the risks and tackle the various complex elements of such a project, but you are correct that acquiring several properties can indeed take some time...especially if you are fussy and particular as I am lol

 

All the best,

Richard